Lawsuit that claims Apple and Amazon elbowed out resellers will proceed

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A U.S. district judge has ruled that Apple and Amazon must face a class-action lawsuit that alleges the companies worked together to artificially inflate the price of iPhones and iPads sold on Amazon.

Buy iPhone at retail price from Amazon
Buy iPhone at retail price from Amazon



The lawsuit, initially filed in November, accuses Apple of conspiring with Amazon to eliminate 98% of Apple product resellers to the benefit of Apple and Amazon.

According to Reuters U.S. District Judge John Coughenour has rejected Apple and Amazon's request to throw out the lawsuit.

Prior to an agreement made between Apple and Amazon in 2018, Apple products were only available via third-party marketplaces. The prices were sometimes lower than retail, but the devices were not always in perfect condition.

By 2019, the number of Apple resellers took a nosedive, reportedly by design. Apple's new agreement now limits the sale of their products to authorized resellers or those who purchase $2.5 million worth of refurbished inventory every 90 days. This is a significant change from their previous policy.

The lawsuit says that the number of Apple retailers on Amazon fell by 98%, from nearly 600 resellers to 7.

According to the lawsuit, Amazon gained an advantage from selling products at prices that were 20% higher than what they would have been otherwise.

Apple's large size makes it a frequent target of class action lawsuits and patent claims. These legal battles can drag on for years, and even if they are won, parties in the class receive only a small fraction of the settlement while the attorneys earn millions.

Read on AppleInsider

Comments

  • Reply 1 of 9
    ITGUYINSDITGUYINSD Posts: 516member
    JP234 said:
    This case is mystifying to me. Apple is selling the new 14" M2 MacBook Pro (16GB/512GB) direct for $1,999. AppleCare+ is $299 extra.

    I just bought that same computer on Amazon for $1749. And Applecare+ was $279.

    How is that a conspiracy or price rigging? Because B&H AND Adorama had it for the same price as Amazon.
    I don't get it either.  Amazon's prices on Apple products are often some of the lowest.  How could they be "20% higher than what they would have been otherwise."?  Otherwise where?  Some shifty 3rd party nobody selling grey market on Amazon that doesn't return emails when you need support?  Product meant for Central America and being resold in the US?  I'll take cheapest, fastest deliver and backed by Amazon.
    edited June 2023 JP234radarthekatronnwatto_cobra
  • Reply 2 of 9
    mknelsonmknelson Posts: 1,127member
    JP234 said:
    This case is mystifying to me. Apple is selling the new 14" M2 MacBook Pro (16GB/512GB) direct for $1,999. AppleCare+ is $299 extra.

    I just bought that same computer on Amazon for $1749. And Applecare+ was $279.

    How is that a conspiracy or price rigging? Because B&H AND Adorama had it for the same price as Amazon.
    The lawsuit seems to be focused on refurbished/second hand Macs rather than pristine new in box models.

    "The prices were sometimes lower than retail, but the devices were not always in perfect condition."

    " Apple's new agreement now limits the sale of their products to authorized resellers or those who purchase $2.5 million worth of refurbished inventory every 90 days."

    Just reading the ArsTechnica article: https://arstechnica.com/tech-policy/2023/06/judge-allows-apple-and-amazon-price-fixing-lawsuit-to-move-forward/

    "The original complaint, filed by Seattle law firm Hagens Berman on behalf of Pennsylvania resident Steven Floyd and a wider class, suggests that Apple and Amazon's agreement, originally framed as a way of removing counterfeit or low-quality Apple products from the store, denies customers competitive pricing on iPhones and iPads. The suit claimed that the agreement essentially killed the market for refurbished Apple goods on Amazon while giving Amazon a discount of up to 10 percent on its own sales of Apple goods. The suit notably claimed that there were more than 600 vendors of Apple goods on Amazon in early 2018 but only seven by mid-2019."
    edited June 2023 watto_cobraFileMakerFeller
  • Reply 3 of 9
    charlesncharlesn Posts: 861member
    Amazon's third party marketplace is a notorious sewer of unscrupulous sellers and there were legitimate reasons for Apple to clean up and limit the third party marketplace for refurbs/used/open box Apple products on Amazon. It was like the wild west in terms of truthful representations of what was being sold. And if a buyer has a bad experience with an Apple product as a result, it creates a brand problem for Apple, not the third party seller. Authorized resellers and/or larger players buying $10 million worth of refurb inventory per year have too much skin in the game to try hoodwinking buyers. Apple could easily deauthorize them or cut off their inventory. But for those who enjoy the thrill of lower prices in that wild west environment, there's always ebay. 
    pscooter63ronnwatto_cobra
  • Reply 4 of 9
    fred1fred1 Posts: 1,112member
    The Reuters article is much clearer.
    https://www.reuters.com/legal/apple-amazon-must-face-consumer-lawsuit-over-iphone-ipad-prices-us-judge-2023-06-09/

    The complaint is over Apple and Amazon agreeing to limit the number of resellers of Apple products through Amazon. This is anticompetitive and therefore illegal. The claim that it was meant to limit the number of resellers of bogus products is what is being examined. 
    FileMakerFeller
  • Reply 5 of 9
    davidwdavidw Posts: 2,060member
    fred1 said:
    The Reuters article is much clearer.
    https://www.reuters.com/legal/apple-amazon-must-face-consumer-lawsuit-over-iphone-ipad-prices-us-judge-2023-06-09/

    The complaint is over Apple and Amazon agreeing to limit the number of resellers of Apple products through Amazon. This is anticompetitive and therefore illegal. The claim that it was meant to limit the number of resellers of bogus products is what is being examined. 
    If that is what you got from the article, then the article is in no way "clearer". 

    The lawsuit (this one anyway) is claiming that consumers that purchased new iPhones and iPads on Amazon, paid a higher price than otherwise, if Apple and Amazon had not conspired to reduce the number of resellers (and thus competition). Amazon reducing the number of resellers (of Apple products) is not "anti-completive", if it can not be proven that their reduction kept the price of new iPhones and iPads higher that otherwise.

    The thing one have to remember is the vast majority of resellers that got eliminated because of the higher requirements Amazon placed on them to qualify as an Apple reseller, were not selling new iPhones and iPads. They were selling refurbished Apple products. This lawsuit would have to prove that because there were less resellers on Amazon that were selling used Apple iPhones and iPads, consumers shopping on Amazon were forced pay a higher price for the new ones. In other words, Amazon did not have to discount their new iPhones and iPads as much, because there was less competition from resellers selling refurbished iPhones and iPads, on Amazon. The plaintiffs for this class action lawsuit are consumers that  bought new iPhones and iPads from Amazon (after the Amazon/Apple agreement), not the resellers that were eliminated from selling refurbished Apple products.


    Here's a much clearer article, that don't leave out some of the important aspects pertaining to this suit. 

    https://arstechnica.com/tech-policy/2023/06/judge-allows-apple-and-amazon-price-fixing-lawsuit-to-move-forward/

    Take note from this article .....

    >.... (Judge) Coughenour wrote, and the fact that the plaintiffs agree that not all resellers of Apple products were removed from Amazon's marketplace, a "per se" finding of antitrust violation could not be sustained.<


    watto_cobraJP234ronnFileMakerFeller
  • Reply 6 of 9
    eriamjheriamjh Posts: 1,650member
    fred1 said:
    The Reuters article is much clearer.
    https://www.reuters.com/legal/apple-amazon-must-face-consumer-lawsuit-over-iphone-ipad-prices-us-judge-2023-06-09/

    The complaint is over Apple and Amazon agreeing to limit the number of resellers of Apple products through Amazon. This is anticompetitive and therefore illegal. The claim that it was meant to limit the number of resellers of bogus products is what is being examined. 
    Bingo.  Defense of Apple is embarrassing, here.   Saying sellers below a certain price or quality hurts Apple is disingenuous and downright utter BS and you know it.  What Apple did was anti-competitive and is deserving of this lawsuit.  Saying “go to eBay” shows how dismissive it is because if it’s Ok to sell Apple “junk” on eBay but not Amazon because of an agreement then you do not understand what Antitrust laws are for.  

    I love Apple, but Apple does some shady sh*t and this is one of those instances. 

    Shame on defenders of Apple in this case.  Shame.
  • Reply 7 of 9
    davidwdavidw Posts: 2,060member
    JP234 said:
    davidw said:
    fred1 said:
    The Reuters article is much clearer.
    https://www.reuters.com/legal/apple-amazon-must-face-consumer-lawsuit-over-iphone-ipad-prices-us-judge-2023-06-09/

    The complaint is over Apple and Amazon agreeing to limit the number of resellers of Apple products through Amazon. This is anticompetitive and therefore illegal. The claim that it was meant to limit the number of resellers of bogus products is what is being examined. 
    If that is what you got from the article, then the article is in no way "clearer". 

    The lawsuit (this one anyway) is claiming that consumers that purchased new iPhones and iPads on Amazon, paid a higher price than otherwise, if Apple and Amazon had not conspired to reduce the number of resellers (and thus competition). Amazon reducing the number of resellers (of Apple products) is not "anti-completive", if it can not be proven that their reduction kept the price of new iPhones and iPads higher that otherwise.

    The thing one have to remember is the vast majority of resellers that got eliminated because of the higher requirements Amazon placed on them to qualify as an Apple reseller, were not selling new iPhones and iPads. They were selling refurbished Apple products. This lawsuit would have to prove that because there were less resellers on Amazon that were selling used Apple iPhones and iPads, consumers shopping on Amazon were forced pay a higher price for the new ones. In other words, Amazon did not have to discount their new iPhones and iPads as much, because there was less competition from resellers selling refurbished iPhones and iPads, on Amazon. The plaintiffs for this class action lawsuit are consumers that  bought new iPhones and iPads from Amazon (after the Amazon/Apple agreement), not the resellers that were eliminated from selling refurbished Apple products.


    Here's a much clearer article, that don't leave out some of the important aspects pertaining to this suit. 

    https://arstechnica.com/tech-policy/2023/06/judge-allows-apple-and-amazon-price-fixing-lawsuit-to-move-forward/

    Take note from this article .....

    >.... (Judge) Coughenour wrote, and the fact that the plaintiffs agree that not all resellers of Apple products were removed from Amazon's marketplace, a "per se" finding of antitrust violation could not be sustained.<


    Pretty lucid way to explain an almost impenetrable contention. If I understand correctly, Apple and Amazon are colluding to price resellers of used product out of the market, so potential customers will buy new ones from Amazon or Apple.

    The big problem with this initiative, and the reason it's going to fail, is that it's virtually impossible to prove. And even if it were provable, how is it breaking the law by giving a better price to someone who can spend $25 million/month on Apple used or refurbs than to someone who can buy $10 thousand/month?

    Not quite. What's being claimed in this lawsuit is that because Amazon reduced the number of resellers (of Apple products) by raising the requirements needed to be an Apple reseller on Amazon, Amazon did not have to discount the sale of new iPhones and iPads as much, in order to compete with the resellers. So the claim is that consumers that bought new iPhones and iPads (From Amazon since 2019) paid more than if there were more resellers competing. Any discount they got, doesn't matter as it should have been more of a discount. It's not about whether the consumer that bought a new iPhone or iPad on Amazon would have bought a used one, if there were more Apple resellers.

    Since there are still Apple resellers, (besides Amazon) on Amazon, any Amazon shopper that bought a new iPhone or iPad could still have bought one from any of the Apple resellers that remained. If Amazon had eliminated all Apple resellers (in the Amazon MarkerPlace), then Amazon would mostly have faced anti-trust violation charges by some government agency by now. It's been over 4 years since Amazon started reducing the number of Apple resellers and i have not yet heard of any case representing the Apple resellers that got eliminated. If what Amazon did was truly illegal.


    >The lawsuit accuses the two tech giants of conspiring to artificially inflate the prices of iPhones and iPads sold on Amazon's platform. <

    >The plaintiffs, in this case, are US residents who purchased new iPhones and iPads on Amazon starting in January 2019.<

    How can Amazon "inflate" the price of a new iPhone or iPad? Was Amazon selling them for more that MSRP? And Amazon shoppers were paying the "inflated" price because they couldn't shop anywhere else? Like at a Walmart, Target, BestBuy, BHPhoto, ATT Store, etc.. So the compliant is that Amazon did not have to discount the price of new iPhones and iPads as much as they should have, if there was more competition from resellers. The "inflated" price is Amazon not being forced to offer a bigger discount.

    And as the the Judge (and you) pointed out, the relationship between Amazon and Apple is that of a manufacturer and distributor. They are not partners or that Apple is a reseller on Amazon.  Amazon buys iPhones and iPads from Apple at wholesale discount (depending on volume), so it doesn't matter to Apple what price Amazon sells them for. Amazon is no different than Walmart, Target, Best Buy, etc. So there's no monetary gain for Apple whether Amazon sells new iPhones and iPads, at a discount or full MSRP.  

    >US District Judge John Coughenour rejected attempts by Apple and Amazon to dismiss the prospective class action on various legal grounds. He said that the "validity" of the relevant market, which is a crucial aspect in antitrust litigation, should be determined by a jury. <

    This is why the suit is going to trial. That whether Amazon and Apple agreement (regarding the reduction of Apple resellers on Amazon) is anti-competitive, depends on defining the "relevant market". If Amazon is its own "relevant market", then getting rid of resellers on Amazon greatly reduces competition in that market. But if Amazon competes in a market that includes the likes of Walmart, Best Buy, Target, ATT Stores, etc (when selling Apple products), then reducing resellers on Amazon plays a much smaller role in reducing competition. Are consumers locked into buying Apple products from Amazon? Unlike the Judge in the Epic/Apple lawsuit, this Judge is leaving a jury to determine what is the "relevant market" in this case.  




    ronnFileMakerFeller
  • Reply 8 of 9
    davidwdavidw Posts: 2,060member
    eriamjh said:
    fred1 said:
    The Reuters article is much clearer.
    https://www.reuters.com/legal/apple-amazon-must-face-consumer-lawsuit-over-iphone-ipad-prices-us-judge-2023-06-09/

    The complaint is over Apple and Amazon agreeing to limit the number of resellers of Apple products through Amazon. This is anticompetitive and therefore illegal. The claim that it was meant to limit the number of resellers of bogus products is what is being examined. 
    Bingo.  Defense of Apple is embarrassing, here.   Saying sellers below a certain price or quality hurts Apple is disingenuous and downright utter BS and you know it.  What Apple did was anti-competitive and is deserving of this lawsuit.  Saying “go to eBay” shows how dismissive it is because if it’s Ok to sell Apple “junk” on eBay but not Amazon because of an agreement then you do not understand what Antitrust laws are for.  

    I love Apple, but Apple does some shady sh*t and this is one of those instances. 

    Shame on defenders of Apple in this case.  Shame.

    No that is not what being said and is utter BS. Many, if not most, of the "Apple resellers" on Amazon were selling counterfeit Apple accessories and gray market Apple products.There was no standard on what constitute a "refurbished" Apple product, so many of these resellers just labeled their Apple products as "refurbished". And many of the Amazon shoppers were unaware that they were not buying Apple genuine products or Apple products that weren't refurbished by Apple, because they thought they were buying from an Apple "Authorized Apple reseller". Apple and true Authorized Apple resellers were complaining about this and for the longest time, Amazon did nothing about it. Why should they, Amazon was still getting a commission on the sales. So when it came time for Amazon to make a ton of money selling Apple products, Apple took the opportunity to force Amazon to get rid of these type of resellers. And as an incentive, Apple offered Amazon a 10% discount on their wholesale discount price of Apple products, to help offset the lost commission. You have to remember, Amazon was also making money on all the Apple products these resellers were selling.

    Amazon Marketplace belongs to Amazon. Amazon gets to make the rules. No one is forced to sell their products on Amazon.


    >As we said, many Apple sellers tried to sell fake at least once. In 2016, nearly 90% of Apple devices sold on Amazon weren’t 100% genuine. This becomes a devastating issue when you consider paying money for iPod chargers and earphones, which usually cost more than other brands.<


    edited June 2023 ronnFileMakerFeller
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